A farmout agreement is used when the "farmor" agrees to assign acreage to the "farmee" in return for the "farmee" performing specified drilling and testing obligations, with the "farmor" also reserving an interest in the acreage assigned and in the production from the wells drilled by the second company.
Houston Texas Farm out Agreement — Short Form is a legal document commonly used in the oil and gas industry to outline the terms and conditions of a farm out agreement between an armor (the party who owns the rights to the oil and gas property) and a farmer (the party who wants to acquire those rights). This agreement allows the farmer to earn an interest in the armor's property by funding and undertaking exploration and development activities. The Houston Texas Farm out Agreement — Short Form typically contains the following key sections and provisions: 1. Parties: This section identifies the armor and the farmer, including their legal names and addresses. It also describes the specific oil and gas property subject to the farm out agreement. 2. Grant and Assignment: This section outlines the armor's agreement to grant and assign a specified working interest in the property to the farmer, subject to certain conditions and obligations. 3. Consideration: The consideration section details the financial or other benefits that the farmer is obligated to provide to the armor in exchange for the working interest. This may include cash payments, drilling obligations, and certain performance criteria. 4. Exploration and Development Obligations: This section outlines the farmer's obligations to conduct exploration and development activities on the property within specific timelines. It may specify the number and depth of wells to be drilled, the testing and completion procedures, and any technology or techniques to be used. 5. Term and Termination: The agreement establishes the duration of the farm out arrangement, typically referred to as the 'term.' It also sets forth the conditions upon which the agreement may be terminated, such as failure to complete the specified obligations, breach of contract, or bankruptcy of either party. 6. Title and Warranty: This clause confirms that the armor represents and warrants their ownership and rights to the property. It also includes provisions for handling any potential defects in title or ownership. 7. Confidentiality: Often, a confidentiality provision is included to protect any proprietary or sensitive information shared between the parties during the transaction. While there may be variations in the specific terms and provisions of Houston Texas Farm out Agreement — Short Forms depending on the parties involved and the specific circumstances, the core elements discussed above remain consistent. Furthermore, it's important to note that there may be different types of short forms or variations of farm out agreements used in Houston, Texas, specific to the region or industry niche. However, the standard short form generally covers the essential aspects of the farm out transaction.Houston Texas Farm out Agreement — Short Form is a legal document commonly used in the oil and gas industry to outline the terms and conditions of a farm out agreement between an armor (the party who owns the rights to the oil and gas property) and a farmer (the party who wants to acquire those rights). This agreement allows the farmer to earn an interest in the armor's property by funding and undertaking exploration and development activities. The Houston Texas Farm out Agreement — Short Form typically contains the following key sections and provisions: 1. Parties: This section identifies the armor and the farmer, including their legal names and addresses. It also describes the specific oil and gas property subject to the farm out agreement. 2. Grant and Assignment: This section outlines the armor's agreement to grant and assign a specified working interest in the property to the farmer, subject to certain conditions and obligations. 3. Consideration: The consideration section details the financial or other benefits that the farmer is obligated to provide to the armor in exchange for the working interest. This may include cash payments, drilling obligations, and certain performance criteria. 4. Exploration and Development Obligations: This section outlines the farmer's obligations to conduct exploration and development activities on the property within specific timelines. It may specify the number and depth of wells to be drilled, the testing and completion procedures, and any technology or techniques to be used. 5. Term and Termination: The agreement establishes the duration of the farm out arrangement, typically referred to as the 'term.' It also sets forth the conditions upon which the agreement may be terminated, such as failure to complete the specified obligations, breach of contract, or bankruptcy of either party. 6. Title and Warranty: This clause confirms that the armor represents and warrants their ownership and rights to the property. It also includes provisions for handling any potential defects in title or ownership. 7. Confidentiality: Often, a confidentiality provision is included to protect any proprietary or sensitive information shared between the parties during the transaction. While there may be variations in the specific terms and provisions of Houston Texas Farm out Agreement — Short Forms depending on the parties involved and the specific circumstances, the core elements discussed above remain consistent. Furthermore, it's important to note that there may be different types of short forms or variations of farm out agreements used in Houston, Texas, specific to the region or industry niche. However, the standard short form generally covers the essential aspects of the farm out transaction.
